Port of New Orleans, Board of Trade chiefs oppose changes to Public Belt's operations, finances

The presidents of the Port of New Orleans and the Board of Trade this morning encouraged the new slate of commissioners of the city-owned Public Belt Railroad to keep the agency under the current public operating structure and not to pilfer its coffers to feed the city's strapped general fund.

Michael DeMocker, The Times-PicayuneGary Lagrange, president and CEO of the Port of New Orleans, at the State of the Port address last month.

In brief comments during an 8 a.m. meeting at the City Council chambers, port President Gary LaGrange addressed a pair of issues that Mayor Mitch Landrieu or his aides has said the administration may consider as it overhauls the Public Belt in light of the recent resignation of the agency's general manager and its entire board of commissioners.

Landrieu has suggested that the board should consider whether the city should try to sell or lease the rail line to a private operator. Administration officials also have suggested that they may tap the profits of independent boards and commissions that oversee city-owned assets to bolster the city's operating revenues.

LaGrange opposed both ideas. Calling the Public Belt's rail lines through dock facilities "key and paramount" to port operations, he said the agency's current set-up provides excellent service, though he acknowledged that changes must be made to the structure of the board, including shrinking its size and reducing the length of 16-year terms.

"We may have a flat tire, but the wheel is still good," LaGrange said. "We believe it is a good system, basically. It does need some tweaking."

Though he opposed filching revenue from the Public Belt to finance municipal services, LaGrange said that if such a policy is implemented, the administration should recoup "a percentage of net profits into a capital maintenance fund."

New Orleans Board of Trade President Mike Kearney later in the meeting said he endorses LeGrange's positions.

"We feel that the present form of governance, with some tweaking, the present form of ownership is the way to go for the New Orleans Public Belt Railroad. It's been well run, by and large," he said, adding that the current management team is "absolutely pros at what they do."

In addition, Kearney implored the board not to auction off three vintage Pullman cars that the agency in recent years spent more than $2.8 million to rebuild.

The so-called "business cars," which were used to host catered parties for prospective clients, Public Belt commissioners and local charities, have been mothballed since the attorney general this summer told board members that state law requires the agency to charge for their use.

Though the cars have emerged as a symbol of runaway spending at the Public Belt, Kearney said they could "become a revenue-producer for the belt."

"I think the Public Belt Railroad is the proper steward for these cars. They could be a tremendous economic asset for our city," Kearney said.

Kearney recommended that agency officials consult with organizations including GNO Inc. and the public-private New Orleans Business Alliance to figure out how the business cars might be utilized -- within the parameters of state and local ethics rules.

Also during the two-hour meeting, top Public Belt administrators provided the board with an overview of agency finances and the proposed 2011 budget.

On the recommendation of its finance committee, the board adopted the $15 million spending plan, which anticipates an operating surplus of about $475,000 next year and projects an additional $2.7 million in capital spending.

Interim General Manager John Morrow told the board that in the 63 days since his predecessor, Jim Bridger, resigned amid revelations of rampant spending on meals, travel and a pair of vintage Pullman cars, his management team has cut $725,000 in unnecessary expenses through year's end and refocused on the agency's mission.

Administrators have adopted the recommendations of the legislative auditor, who last month issued a scathing report that cited misspending and overspending under the previous board. Changes include eliminating employee credit cards and take-home cars, 12 to 15 of which will be sold as soon as this week.

"By removing the distractions, we can fully concentrate on the core business, which is serving the port and serving our customers," Morrow said.

Commissioners this morning also heard from executives of Burlington Northern Santa Fe Railway and the Union Pacific Railroad, two of the six Class I railroads that use the city-owned railroad, and from a representative of one of the Public Belt's employee unions.